Deepak Fertilisers’ Stock Gained More Than 5% Today, After June Quarter Result

Mumbai, 29 July 2025: Deepak Fertilisers and Petrochemicals Corporation Ltd (NSE: DEEPAKFERT, BSE: 500645) reported a strong performance for the quarter ended 30 June 2025, with its consolidated net profit rising 22% year-on-year to ₹244 crore. The profit growth was led by robust volume expansion in the specialty fertiliser segment and improved momentum in its chemicals business, despite pricing pressures in key products, the company said.

The stock closed the day today, up by 5.56% at Rs 1,605.

Revenue Up 17% YoY, EBITDA Shows Steady Growth

Backed by broad-based demand across business segments, consolidated revenue grew 17% YoY to ₹2,659 crore. Operating EBITDA for the quarter came in at ₹513 crore, a 10% YoY rise and a 7% sequential increase. EBITDA margin stood at 19.3%, slightly lower than 20.4% in the year-ago period, though improving from 18% in the previous quarter. The profit before tax rose 28% YoY to ₹345 crore.

While net profit saw a quarter-on-quarter decline of 12%, this was primarily due to a one-off deferred tax reversal of ₹37 crore in the previous quarter (Q4FY25). PAT margin for Q1FY26 stood at 9.1%, up 38 basis points YoY but down 114 basis points sequentially.

Fertiliser Segment Profit More Than Doubles Amid Croptek and Solutek Demand

The fertiliser segment delivered stellar growth, with revenue rising 28% YoY to ₹1,25,267 crore. Segment profit surged by 125% YoY to ₹11,912 crore. Specialty fertilisers saw 21% YoY volume growth, driven by strong demand for Croptek and Solutek products. Specialty fertilisers now contribute 45% to the Crop Nutrition Business and 25% to overall group revenues.

Chemical Segment Faces Margin Pressure Despite Stable Revenue

Chemical revenues stood at ₹1,39,903 crore, up 8% YoY, but segment profit declined 9% to ₹36,720 crore. This contraction was attributed to softness in Isopropyl Alcohol (IPA) and ammonia prices. However, mining chemicals gained traction, with B2C volumes contributing 16% to segment revenues and overall Technical Ammonium Nitrate (TAN) volumes rising 7% YoY.

Net Debt Down and Capital Projects Progressing Steadily

Deepak Fertilisers reported a significant reduction in net debt, which fell to ₹3,078 crore from ₹3,305 crore in March 2025. Consequently, the Net Debt to EBITDA ratio improved from 1.72x to 1.50x, reflecting better financial leverage.

The company spent ₹377 crore in capital expenditure during the quarter. Major projects are on track:

• Gopalpur TAN plant is 80% complete
• Dahej Nitric Acid facility is 57% complete

Both are expected to be commissioned by the end of FY26. The total outlay for these projects is estimated at ₹4,661 crore.

Tax Demand of ₹581 Cr Quashed in Favourable ITAT Ruling

In a major legal development, the Income Tax Appellate Tribunal ruled in favour of Mahadhan AgriTech Ltd, a subsidiary of Deepak Fertilisers, nullifying income tax demands of ₹581 crore. This is expected to lead to the withdrawal of penalty orders amounting to ₹479 crore, offering substantial legal relief and reducing contingent liabilities.

Management Reaffirms Strategy for Sustainable and Profitable Growth

S.C. Mehta, Chairman and Managing Director, highlighted that the company’s strategic transformation is yielding results, especially in specialty products. He emphasised continued focus on customer engagement, disciplined execution, and operational agility, reinforcing the company’s vision for long-term sustainability and farmer-centric innovation.

Share Price Rallies 5.56% on Strong Quarterly Performance

Following the announcement of its robust Q1FY26 results, Deepak Fertilisers and Petrochemicals Corp Ltd (NSE: DEEPAKFERT) witnessed a sharp rise in its share price, closing at ₹1,605, up ₹84.60 or 5.56% by 3:30 PM IST on 29 July 2025. The stock opened at ₹1,510 and touched an intraday high of ₹1,618.90. Investor sentiment was buoyed by the strong fertiliser performance, debt reduction, and favourable tax ruling.

Deepak Fertilisers Key Metrics Reflect Strong Position and Attractive Valuation

As of 29 July 2025, Deepak Fertilisers holds a market capitalisation of ₹20,291.5 crore, among the highest in its sector. Despite strong fundamentals, its PE ratio of 20.7 and Price to Book of 3.6 remain below the industry median, suggesting potential undervaluation. Institutional holding increased by 1.46% to 23.52%, reflecting growing confidence. While revenue and net profit growth metrics are slightly below the industry median, the company scores high on operating margins (OPM TTM at 18.5%) and boasts a strong Piotroski Score of 8, indicating robust financial health.

Its Return on Equity (15%) is among the highest in the industry, while Return on Assets (7.1%) trails the sector median. With 20.3% relative returns versus Nifty50 and 10.3% versus its sector in the past quarter, Deepak Fertilisers continues to outperform key benchmarks.

Deepak Fertilisers delivered a strong Q1FY26 performance, led by specialty fertilisers and strategic execution. Despite margin pressures in chemicals, robust revenue growth, debt reduction, and a favourable tax ruling strengthened investor confidence. With key projects progressing well, the company remains on track for sustainable and profitable growth in FY26.

REF: https://nsearchives.nseindia.com/corporate/DEEPAKFERT2_29072025144453_Resultoutcome30062025.pdf

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